Lebanon re­ceives two gas ex­plo­ration bids: min­is­ter

Abi Khalil de­fends tim­ing of ten­der, de­nies politi­cians be­hind bid­ding firms

The Daily Star (Lebanon) - - FRONT PAGE - By Osama Habib

BEIRUT: En­ergy and Wa­ter Min­is­ter Ce­sar Abi Khalil said Thurs­day that Lebanon had re­ceived two bids to op­er­ate the off­shore gas blocks but de­clined to dis­close the names of the com­pa­nies and the blocks that made the bids.

“All that I can say now is that we re­ceived two bids and these bids will be eval­u­ated by a spe­cial com­mit­tee. Once the com­mit­tee fi­nal­izes its eval­u­a­tion and de­ter­mines whether they meet the re­quire­ments then all the information will be re­vealed to the public,” he told The Daily Star.

The blocks that were of­fered to in­ter­ested com­pa­nies were 1,4,8,9 and 10 out of the 10 blocks that were sur­veyed by in­ter­na­tional firms to de­ter­mine the po­ten­tial size of hy­dro­car­bon re­serves.

But Khalil did not dis­close de­tails about the of­fers made by the in­ter­na­tional firms.

Ac­cord­ing to the con­di­tions stip­u­lated by the Le­banese Petroleum Ad­min­is­tra­tion, the in­ter­na­tional com­pa­nies must form con­sor­tiums and each con­sor­tium would of­fer a bid to ex­plore for gas in one of the five blocks that are up for grabs.

“Of course the na­tion­al­i­ties of the com­pa­nies that made the of­fers are Ital­ian, French and Rus­sian. I can’t say more than that. Once the com­mit­tee fi­nal­izes its re­port Fri­day, I will dis­close all the de­tails,” Abi Khalil said.

Ac­cord­ing to the En­ergy Min­istry, 51 com­pa­nies have qual­i­fied to bid in the 2017 round.

The 2013 round pre­qual­i­fied 12 op­er­a­tors to bid along with 34 non­op­er­at­ing com­pa­nies.

The U.S. com­pa­nies ap­par­ently did not sub­mit of­fers to ex­plore for gas off the Le­banese coast although some of them had been among the firms that had pre­qual­i­fied for bid­ding in 2013 in­clud­ing ExxonMo­bil and Chevron.

Ques­tions will prob­a­bly be raised on why the re­main­ing com­pa­nies that pre­qual­i­fied in 2013 and 2017 did not make any of­fers to ex­plore for gas in Lebanon.

In his news con­fer­ence, the min­is­ter es­ti­mated that it would take five to six years for the win­ning com­pa­nies to start the ac­tual ex­trac­tion of gas off the Le­banese coast.

Abi Khalil warned that some crit­ics would prob­a­bly start ask­ing about the tim­ing of the ten­der and why it was held now and if the cur­rent prices of oil are suit­able to in­vite com­pa­nies to bid for gas ex­plo­ration. “Some may even ask if these com­pa­nies are shell com­pa­nies,” he added.

Abi Khalil added that all the bids

were in ac­cor­dance to the con­di­tions set by the gov­ern­ment and the LPA, re­ject­ing any sug­ges­tions that politi­cians may be be­hind these firms. “Why to­day? Is the price ap­pro­pri­ate to­day? No doubt that in 2013 the sit­u­a­tion was bet­ter but still the op­por­tu­nity is still there. The price of oil does not af­fect the share of the state, but on the bud­get of com­pa­nies that will ex­plore, which should ex­pe­dite the process of ex­plo­ration,” he stressed.

Abi Khalil re­futed claims that the min­is­ter’s pow­ers were ex­ces­sive. He added that no min­is­ter could uni­lat­er­ally take any cru­cial de­ci­sions with­out the con­sent of the en­tire Cab­i­net.

Abi Kalil also promised to es­tab­lish a sov­er­eign fund in the near fu­ture In prin­ci­ple all the pro­ceeds from the gas ex­plo­ration would au­to­mat­i­cally be al­lo­cated to the sov­er­eign fund.

The gov­ern­ment was hop­ing to award the con­tracts for the win­ning com­pa­nies be­fore the end of 2017 and for the ac­tual ex­plo­ration to start at the be­gin­ning of 2018.

It is not cer­tain yet whether the gov­ern­ment will be com­pelled to re­vise the ten­der doc­u­ments or even review the oil tax law if the of­fers made Thurs­day were not up to ex­pec­ta­tions. If the com­mit­tee gives its seal of ap­proval for the of­fers Fri­day, it would be a land­mark achieve­ment for Lebanon.

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